scholarly journals How have the European central bank’s monetary policies been affecting financial markets in CEE-3 countries?

2020 ◽  
Author(s):  
Wojciech Grabowski ◽  
Ewa Stawasz-Grabowska
Keyword(s):  
Central Bank ◽  
Financial Markets ◽  
Sovereign Debt ◽  
European Central Bank ◽  
Spillover Effects ◽  
Monetary Policies ◽  
The Czech Republic ◽  
Sovereign Bond ◽  
European Central ◽  
Daily Data

AbstractThis paper aims to contribute to the growing pool of literature on the spillover effects of the European Central Bank’s (un)conventional monetary policies on the exchange rate, sovereign bond and equity markets of the Czech Republic, Hungary and Poland (CEE-3 countries), which are collectively known as the CEE-3 countries. The study is conducted using daily data from January 2010 to September 2019. Our results indicate that the financial markets of the CEE-3 countries have been strongly influenced by the nonstandard measures enacted by the European Central Bank, particularly those involving purchases of euro-area sovereign debt. The strongest spillover effects were identified for the Securities Markets Program, while the effects from the Outright Monetary Transactions program turned out to be the most durable. At the same time, the financial markets of the CEE-3 countries were found to have been largely unaffected by interest rate changes enacted by the European Central Bank.

scholarly journals The democratic deficit and European Central Bank crisis monetary policies

2019 ◽  
Vol 26 (1) ◽  
pp. 81-93 ◽  
Author(s):  
Anna-Lena Högenauer ◽  
David Howarth
Keyword(s):  
Central Bank ◽  
Sovereign Debt ◽  
European Central Bank ◽  
Policy Making ◽  
Debt Crisis ◽  
Democratic Legitimacy ◽  
Sovereign Debt Crisis ◽  
Monetary Policies ◽  
European Central ◽  
International Financial Crisis

This article presents the argument that European Central Bank (ECB) policy-making from the start of the sovereign debt crisis in 2010 undermined the democratic legitimacy of the ECB. We start with the argument – defended by a number of scholars including Majone and Moravcsik – that where European Union (EU) policy-making is technocratic and does not have significant redistributive implications it can benefit from depoliticization that does not undermine the democratic legitimacy of this policy-making. This is notably the case where EU institutions have narrow mandates and are constrained by super-majoritarian decision-making. Prior to the international financial crisis, the ECB’s monetary policies were shaped entirely by the interpretation that its mandate was primarily to ensure low inflation. From the outbreak of the sovereign debt crisis, the ECB adopted a range of policies which pushed its role well beyond that interpretation and engaged in a form of redistribution that directly undermined treaty provisions.

scholarly journals The European Central Bank Quantitative Policy and Its Consistency with the Demand for Liquidity

2015 ◽  
Vol 62 (3) ◽  
pp. 425-451 ◽  
Author(s):  
Sviatlana Hlebik ◽  
Giovanni Verga
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Sovereign Debt ◽  
European Central Bank ◽  
Banking System ◽  
Market Conditions ◽  
Policy Strategy ◽  
European Central

Abstract In 2008 the European Central Bank added a new quantitative policy strategy to its traditional control of the interest rates. This new policy, sometimes called “enhanced credit support”, consists of fully satisfying the demand for liquidity of banks, with the European Central Bank deciding only the timing and characteristics of its interventions. This study analyses the market conditions in which these measures have been taken and their consistency with the demand for liquidity by the banking system. Measures in favour of the sovereign debt of PIIGS countries are also considered.

scholarly journals ECB independence and accountability today: Towards a (necessary) redefinition?

2019 ◽  
Vol 26 (1) ◽  
pp. 3-16
Author(s):  
Diane Fromage ◽  
Paul Dermine ◽  
Phedon Nicolaides ◽  
Klaus Tuori
Keyword(s):  
Financial Crisis ◽  
Central Bank ◽  
European Central Bank ◽  
Banking Union ◽  
Special Issue ◽  
Monetary Policies ◽  
European Central ◽  
Introductory Article ◽  
Recent Developments ◽  
Economic And Financial Crisis

This introductory article sets the ground for the analysis performed in the articles included in this Special Issue. It shows why a new analysis of the European Central Bank (ECB)’s accountability is required by referring to recent developments, and by underlining how much the ECB’s role and standing have changed since its creation 20 years ago. Indeed, its resorting to unconventional monetary policies in response to the recent economic and financial crisis, as well as the creation of the Banking Union, have significantly affected the ECB. This introduction also recalls the main elements of the debate on the balance between accountability and independence, and shows how this balance has evolved. On the basis of the findings of the articles included in this Special Issue, some conclusions and hypotheses as to the way forward are formulated.

The European Central Bank

2020 ◽  
Author(s):  
Michael Ioannidis
Keyword(s):  
Central Bank ◽  
Sovereign Debt ◽  
European Central Bank ◽  
Debt Crisis ◽  
Central Banking ◽  
Defining Moment ◽  
European Central ◽  
Economic Constitution ◽  
Rules And Principles ◽  
History Of

The European Central Bank (ECB) is the only central bank governed by supranational constitutional law. As such, it is not only the most important institution of the Economic and Monetary Union (EMU), but it also marks a new stage in the history of central banking in general. Historically, the tasks and functions of the ECB have reflected the different stages of development of the EMU. The basic principles governing its function were set out in Maastricht, reflecting the interests and ideas about Europe’s economic constitution prevailing at that time. The sovereign debt crisis that hit Europe in 2010 was the second defining moment for the ECB after Maastricht. It posited the ECB–like the rest of the EMU–to challenges that some of the drafters of the Maastricht Treaty had not fully anticipated. These new challenges led to the adoption of novel instruments and the further clarification of fundamental rules and principles. Most important of these developments was the entrustment of the ECB with a new task, banking supervision, and the adoption of unconventional measures, which proved necessary to fulfil its monetary-policy mandate. Ultimately, not only did the ECB withstand the crisis but it emerged as a protagonist in securing the unity and integrity of the EMU.

scholarly journals The Politicisation of the European Central Bank and the Bundestag

2019 ◽  
Vol 7 (3) ◽  
pp. 291-302 ◽  
Author(s):  
Anna-Lena Högenauer
Keyword(s):  
Central Bank ◽  
European Central Bank ◽  
Right Wing ◽  
Eurozone Crisis ◽  
National Parliaments ◽  
Monetary Policies ◽  
European Central ◽  
The Media ◽  
The Subject ◽  
German Bundestag

The European Central Bank (ECB) became one of the key actors during the Eurozone crisis. However, its prominent role was not without controversy. On one hand, the Eurozone was stabilised, no member state defaulted, and no state had to leave the Euro. On the other hand, the ECB had to stretch its mandate, expand its policy remit, and adopt so-called ‘unconventional’ monetary policies. These attempts to depoliticise political challenges through a technocratic approach reduced the opportunities for democratic contestation, but they also bred frustration that led to politicisation. This article studies to what extent this politicisation affected the perception of the ECB in national parliaments. For this purpose, it studies the extent to which ECB policy has become politicised in the German Bundestag through an analysis of plenary debates from 2005 to 2018. The Bundestag represents an unlikely case for politicisation despite wide-spread criticism of the ECB in the media, as Germany was traditionally attached to creating a highly independent ECB, until recently had no major Eurosceptic right-wing parties, and parliamentary scrutiny of the national central bank is low. However, by studying the salience of ECB policies, the polarisation of opinion in the parliament, as well as the range of actors participating in the debates, this article finds that the ECB’s policies have become politicised and the subject of scrutiny and dissatisfaction.

scholarly journals The European Central Bank, the Euro, and Global Financial Markets

2006 ◽  
Vol 20 (4) ◽  
pp. 67-88 ◽  
Author(s):  
Kathryn M. E Dominguez
Keyword(s):  
Central Bank ◽  
Financial Markets ◽  
Monetary Union ◽  
European Monetary Union ◽  
European Central Bank ◽  
Maastricht Treaty ◽  
European Monetary ◽  
Wide Margin ◽  
European Constitution ◽  
European Central

The economic case for European monetary union was shaky at best when it was first discussed 35 years ago. Europe's leaders felt that monetary union was the capstone to their efforts to create an integrated Europe, and much to the rest of the world's surprise, they succeeded. The introduction of the euro and the establishment of the European Central Bank (ECB) as the monetary authority of Europe went much more smoothly than many predicted. But nagging doubts about the wisdom of integration persist. The slim margins by which the Maastricht Treaty passed and the wide margin on which the European Constitution failed are reminders that Europeans are still wary of giving up their national sovereignty. This wariness also influences the ability of the ECB to efficiently take over monetary policy and limits the ability of the euro to become a true rival of the dollar in global financial markets.

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